Tom’s Outlook on the Market for the Remainder of the Year
Transcript:
Tom Vaughan:
So Katie is asking, “What’s my outlook for the stock market for the rest of this year?”
Here’s my path, or the theme that I’m really looking at very strongly in, it’s pretty straightforward. Over the course of this year, the virus gets under control, to a large degree, much more so than it even is now. And not just here, but throughout the world. The vaccine is rolling out at an ever increasing rate, in most places of the world, especially here in the US. It wasn’t that long ago, we were doing 2 million doses in a day. Now, we’re almost to 5 million doses in a day. So as that continues, that’s going to allow people to get out of their home. One of the things we look at is called Mobility Data, and some Mobility Data tracks cell phones, worldwide.
So the US, if you look at the Mobility Data, it’s 23%, less motion happening right now in the US than last February before, you know with a lockdown started. So that means about a quarter of the population is still staying fairly stable in their in their place. And what that means is there’s a huge amount of people that can still come out, and start to spend and go to restaurants and go to hotels go traveling and those types of things. The other part of this is the regulation side.
So for example, in California, we’re not fully open until June 15, right now, but these are all going to come. Every state’s going to fully open, we’re going to be able to have concerts and go to movies and go out to eat and get in a cruise line and all those things. So what that does is that causes this monstrous amount of money going into these kind of what we call Epicenter stocks. I believe that’s going to continue to make the interest rates go up on these on these bonds. They went down pretty heavily yesterday, coming back up today again. And when that happens, you’re going to see you know, growth stocks generally do poorly in highly no interest rate increasing environment. And I think value stocks are going to be the place to be, especially in these Epicenter stocks.
And what I just talked about with that RCD that Invesco Equal Weight, Consumer Discretionary ETF, I think those types of things are the place to be, because I think we’re gonna have a very, very explosive economic growth. You know, the Federal Reserve is predicting between 6 and 7% Gross Domestic Product growth in for 2021. That’s, that’s a huge number for the US. So I think we’re gonna see some pretty pretty amazing things. I do think that we’re going to see some softness as inflation picks up if it picks up too fast. So we’ll have to see how that plays out.